Washington’s Hegemonic Ambitions Are Not in Sync With Its
Faltering Economy

By Paul Craig Roberts

January 09, 2013 "Information
Clearing House"
- In November the largest chunk of new jobs came
from retail and wholesale trade. Businesses gearing up for
Christmas sales added 65,700 jobs or 45% of November’s
146,000 jobs gain. With December sales a disappointment,
these jobs are likely to reverse when the January payroll
jobs report comes out in February. Family Dollar Stores CEO
Howard Levine told analysts that his company’s customers
were unable to afford toys this holiday season and focused
instead on basic needs such as food. Levine said that his
customers “clearly don’t have as much for discretionary
purchases as they once did.”

For December’s new jobs we return to the old standbys:
health care and social assistance and waitresses and
bartenders. These four classifications accounted for 93,000
of December’s new jobs, 60% of the 155,000 jobs.

Obviously, the economy is not going anywhere except down. It
takes approximately 150,000 new jobs each month to stay even
with population growth and new entrants into the work force.
Few of the jobs that are being created pay well, and the
constant, consistent demand for more poorly paid waitresses,
bartenders and hospital orderlies is difficult to believe.
If Americans cannot afford toys for their kid’s Christmas,
how can they afford to eat and drink out?

Media spin seeks to create a recovery out of thin air, but
these graphs from John Williams (shadowstats.com) show the
reality:

Keep
in mind that the 7.8% unemployment rate (U.3) that is
headlined by the financial media does not include
discouraged workers who have ceased to look for jobs. The
government’s U.6 rate includes workers who have been too
discouraged to seek work for less than a year. This rate of
unemployment is 14.4%, almost twice the U.3 rate that the
media prefers to report.

In 1994 the US government defined out of existence
unemployed Americans who have been discouraged from finding
work for more than a year. John Williams estimates the long
term discouraged workers. When his estimate is added to the
U.6 measure, the US unemployment rate stands at 23%, three
times the reported rate.

The rate of unemployment is so high because millions of US
jobs have been offshored and given to Chinese, Indian, and
other workers and because remaining businesses have been
concentrated in few hands in violation of the anti-trust
laws. (Go to this URL to see the concentration of the media:
http://frugaldad.com/2011/11/22/media-consolidation-infographic/
)

We need to be concerned about a financial media and
economics profession that believes a recovery is underway
when the unemployment rate is so high and the real median
income is so low. It is a mystery how any set of
policymakers could possibly have believed that a country
whose economy is driven by consumer expenditures can
continue to expand when the jobs that produce the incomes
that drive the economy are given to foreigners in foreign
lands.

Essentially, Americans were told a packet of lies designed
to win their gullible acceptance to an economy that produces
high returns for Wall Street, shareholders, and corporate
executives at the expense of everyone else in the country.
The wage savings from the use of overseas labor means large
rewards for the one percent and Family Dollar customers who
cannot afford to buy toys for their children at Christmas.

Paul Craig Roberts was Assistant Secretary of the Treasury
for Economic Policy and associate editor of the Wall Street
Journal. He was columnist for Business Week, Scripps Howard
News Service, and Creators Syndicate. He has had many
university appointments. His internet columns have attracted
a worldwide following.

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